Senate committee hears Department of Public Lands update on hotel leases, compliance gaps

Senator Karina Almagofna, chair of the Senate Standing Committee on Resources, Economic Development and Workforce (REDW), opened the Oct. meeting seeking status updates from the Department of Public Lands on a list of public-land hotel leases and other properties, and pressed the department for details on unpaid rent and enforcement timelines.

The Department of Public Lands (DPL), represented by Secretary Iggy Somer, said DPL is conducting internal audits, reorganizing divisions and rotating compliance inspections but acknowledged gaps in data and staff capacity. "If you sleep on your lease, we will come and visit you, and you may end up in an NOV situation," Somer said, using the committee’s example of Marianas Beach Resort (formerly a Hyatt) to explain DPL’s enforcement approach.

Why it matters: the committee said revenues from leased public lands feed the commonwealth budget and affect other agencies’ planning. Senators questioned whether DPL’s billing, inspection and notice-of-violation (NOV) processes were executed promptly after missed payments and whether the department has adequate tools and legal resources to manage dozens of leases.

Most important facts

- DPL told the committee it oversees roughly 70–80 lessees (not counting temporary occupancy agreements). The department said the compliance division has nine compliance officers and technicians (not including Managaha rangers) who rotate inspections among properties.

- Marianas Beach Resort (MP/MB/MB Capital) is under a notice of violation and was not current on payments. Accounting reported a partial payment of $56,000 on Feb. 6 and another payment of $50,000 on July 2; DPL staff characterized the total collected this year as "a little bit over $106,000." Compliance issued an NOV in August and gave 30 days to cure; the owner was off-island and DPL said it had scheduled a follow-up meeting to determine next steps.

- DPL staff described typical collections practice: invoices are entered into the billing system; accounting calls and follows up after about a week; payments overdue more than 30 days trigger interest charges and further notices; accounts delinquent (60–90 days) are referred to compliance for inspection and NOVs. Accounting leader Evelyn Samlan told the committee: "We expect the payment to be received within a month. So if they didn't pay within a month, we charge interest."

- Other properties: Kanoa Resort is vacant and an RFP is planned for the end of the month; Coral Ocean Point has a renewed agreement pending an amendment; Saipan Country Club had been assigned in part to the utility (CUC) for a headquarters; Pacific Islands Club (PIC) lease negotiations were described as about 90% complete but unsettled on rent and BGR terms; Honest Prophet (San Antonio) is "under watch" and is building north/south wings (reported about 60–70% complete on a wing).

- DPL said some lessees have requested assistance because of economic hardship and several are negotiating payment plans. DPL reported abandoned properties and long-running receivables (accounting said some receivables exceed 120 days; Rota Resort Club alone accounted for roughly $200,000 in older receivables).

Processes, staffing and tools

Committee members pressed DPL on whether it maintains a consolidated, searchable lease inventory or a dashboard that flags payment due dates, expirations and compliance items. Secretary Somer said a dashboard is a priority but lacked funding; he said internal audits and reorganization are under way to improve oversight. Somer also described limits on DPL authority for legal actions and assignments and said the office uses the Attorney General’s Office for legal support.

Accounting and compliance described their handoff: Real estate finalizes leases, accounting monitors payment schedules in the billing system, and compliance issues inspections and NOVs when payments or provisions are delinquent. Compliance said it aims to issue NOVs the same week a delinquency is validated and that director-level review typically takes about one to two weeks.

Committee requests and next steps

The committee asked DPL to provide an updated, itemized report for the properties on the agenda that includes lease expiration dates, annual rent or BGR, payment status, and any active NOVs or inspection reports. Senators signaled they will hold follow-up hearings to examine larger regulatory issues (assignment language, lease template updates) and potential statutory or procedural fixes.

At the close of the meeting, members said they want DPL to reimplement coordinated monthly meetings among the secretary and division directors (a department policy identified at the hearing as "Directive 5") and directed DPL to return with a more complete set of records and a proposed timeline for implementing a dashboard or improved inventory.

Ending

The committee recessed to schedule further discussion and to give DPL time to produce the requested detailed lease and payment report. Meeting business motions (adoption of the agenda and adjournment) passed by voice vote during the session.